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Basel Core Principles and bank soundness: Does compliance matter?

Asli Demirguc-Kunt and Enrica Detragiache ()

Journal of Financial Stability, 2011, vol. 7, issue 4, 179-190

Abstract: This paper studies whether compliance with the Basel Core Principles for effective banking supervision (BCPs) is associated with bank soundness. Using data for over 3000 banks in 86 countries, we find that neither the overall index of BCP compliance nor its individual components are robustly associated with bank risk measured by individual bank Z-scores. We also fail to find a relationship between BCP compliance and systemic risk measured by a system-wide Z-score.

Keywords: Bank; soundness; Regulation; and; supervision; Basel; core; principles (search for similar items in EconPapers)
Date: 2011
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Working Paper: Basel core principles and bank soundness: does compliance matter ? (2009) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:7:y:2011:i:4:p:179-190

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